The worlds of finance and Bitcoin are much more closely related than most people think. Any major development in either area will have a major effect on the other market. Although, Greece’s recent crisis did not boost Bitcoin adoption by all that much, it was yet another indication of how the current financial ecosystem is running on fumes. Portugal’s current financial woes will only strengthen that thought and might provide Bitcoin with the long-awaited boost it really needs.

Portugal is The Defunct Child of the Eurozone

There are so many financial issues going on in Portugal, it makes it difficult to pick a starting point. Similar to most countries around the world, job creation is facing a major uphill battle in Portugal. It is much easier to announce new job openings, than to create them. Also, filling in these new jobs still depends on human resources agencies, who, on the whole, have no clue as to whether or not somebody is capable of fulfilling that specific job role.

But this is not the only major worry for Portugal, as the country is also faced with debt levels that leave no room for a way out, and horrible loans in the past. Solving all of these problems will not be easy, as the only option left is to cut back on spending in a dramatic fashion, combined with tax hikes. Neither of these decisions will go down too well with the general population, though, that much is certain.

Despite all of this information being on the table for more than a year now, it has taken another warning from the International Monetary Funds before actions got shifted into a higher gear. Back in August of 2015, Portugal was told to reduce their debt percentage to 2.7% for 2015. Failure to do so – which seems highly likely at this point – will further increase the country’s debt overhang to 3.2% of economic output.

It is not the first time Portugal has run into financial trouble since becoming part of the Eurozone. Just last year, the country finally exited a 78 billion EUR international bailout programme, which was created to keep Portugal from falling off the financial cliff. An expected growth of 1.6% for 2015 seems possible, but there is no reason for celebration just yet.

Portugal remains incredibly vulnerable to any long-term financial market turbulence, even if things go smoothly within the country itself. Low commodity prices combined with a weak Euro are allowing the Portuguese economy to stay afloat for the time being. But any negative effect on the Euro, in general, could see the country slipping back into negative growth numbers.

Several financial experts fear that Portugal’s recovery has run out of steam already. Despite positive signs in the first few months of 2015, unemployment numbers are on the rise once again. Furthermore, the rising “bad” loans – which offer no benefit to Portugal’s economy whatsoever – continue to wreak havoc on the country.

Last but not least, there is a lot of political instability within Portugal’s borders, none of which are helping matters much either. With political heavyweights at odds with each other, a proper long-term solution to the country’s financial problems is light years away. The upcoming referendum vote on Portugal’s very first post-bailout government will be a determining factor for the country’s future.

Bitcoin Impact Difficult to Predict

At this time, it is next to impossible to determine whether or not the Portugal debacle will have any impact on Bitcoin or vice versa. This situation can not be compared to what happened in Greece a few months ago, as that country was far worse off than Portugal is right now. That being said, Bitcoin could still make an impact on the Portuguese economy in the next few months.

Should Bitcoin make its way into the hands of everyday Portuguese consumers, the Bitcoin price might start trending upwards once again. During the Greece debacle, there was very little to no impact on the Bitcoin price, despite a handful of stories regarding people looking for alternative forms of money. It will be interesting to see what the result will be once the vote has come to a conclusion.